Politics

Stingy Uncle Sam subverts both suppliers and state

18 Mar 2025

Abrupt spending cuts and pressure to justify existing deals are wreaking havoc on US government contractors from Lockheed to Pfizer. Some $760 bln of annual outlays are at risk, spooking investors. Worse, frugality threatens to impair national strategic capabilities for decades.

Why financial warfare could backfire on the US

18 Mar 2025

Washington has sharpened the dollar and technology into powerful weapons. Now erstwhile allies fear they are targets. In this episode of The Big View podcast Edward Fishman, the author of ‘Chokepoints’, explains how economic interdependence is increasingly at odds with security.

Russia’s economy would struggle to cope with peace

17 Mar 2025

After years of overheating, the $2 trln economy risks a hard landing if President Vladimir Putin ends his Ukraine war. A credit boom presages a default wave, while long-term demographic problems have worsened. All the more reason for Putin to avoid switching off the war machine.

US tariff tantrum threatens pricing progress

12 Mar 2025

Inflation was lower than expected in February, though as a 3.1% annual rise in less-volatile consumer prices shows, it’s only one step back to normality. The White House’s latest salvo of trade levies risks raising costs and undoing even this improvement, pinching households.

US-EU tariffs are a skirmish in riskier trade war

12 Mar 2025

Brussels reacted to Washington’s steel levies with 26 bln euros of measures on bourbon and other exports. The next steps could see Europe thwacking Big Tech, and President Trump targeting member states. Their effect is less predictable, and likely to be more painful for Europe.

How the World Bank can defend itself from Trump

12 Mar 2025

The US president is reviewing Washington’s membership of the global lender. Donald Trump could in theory quit the bank or just block its policies. Yet there’s hope for boss Ajay Banga, who has scope to argue that his work is surprisingly compatible with an ‘America First’ agenda.

China’s new financial captain faces tough mission

11 Mar 2025

Beijing has given sovereign fund Central Huijin control of key players in previous market bailouts. The state giant now oversees firms with more than $27 trln in assets. That better equips it for complex tasks such as defusing local government debt and reflating stock prices.

Mark Carney gives Davos Man a shot at redemption

10 Mar 2025

Canada’s incoming prime minister studied at Harvard and Oxford, worked at Goldman Sachs and Brookfield, and oversaw two central banks. He fought crises spawned by the same consensus he epitomizes. Anti-establishment chaos worldwide now puts him in a new role: agent of backlash.

EU firms’ barriers to Russia re-entry are sky-high

10 Mar 2025

Groups like Renault and Inditex quit the country after Moscow’s 2022 invasion of Ukraine. Contracts make it theoretically feasible for them to return. But even if a peace deal proves possible, the risks are too great for European groups to go back.

‘Merz spurt’ will see Europe CEOs rethink US pivot

7 Mar 2025

Donald Trump’s win made bosses from London to Rome even keener on a piece of the pro-growth action. Yet the US president’s tariffs and a fiscal boost from Germany’s Friedrich Merz are turning the tide. Surging stocks in Europe imply its CEOs may find more opportunities at home.

EU telcos face a long road to tech sovereignty

7 Mar 2025

Telecoms bosses gathering in Barcelona for their annual shindig talked up the use of AI and a European answer to Elon Musk’s Starlink. But the former depends on Silicon Valley tools, and the latter is tiny in comparison. Securing growth while developing EU champions looks tricky.

Development aid’s future is hiding in plain sight

6 Mar 2025

Upheaval unleashed by President Donald Trump threatens to extinguish assistance to poorer countries. If overseas aid is to survive, it must find a way of marrying idealism with strategic utility in a more multipolar world. The EU’s eastern expansion is a model worth imitating.

Trump’s trade tactics have a timing problem

5 Mar 2025

In his annual address, the president threatened $53 bln in funds for onshoring chip factories while admitting that his approach of industrial policy by executive fiat may cause a 'disturbance.' CEOs depend on settled plans, not whipsawing tariffs. Near-termism is its own enemy.

Germany ends fiscal self-harm with bazooka bang

5 Mar 2025

Chancellor-to-be Friedrich Merz will ask the state’s lame-duck parliament to OK a 500 bln euro infrastructure fund and to exempt most defence spending from stringent budget rules. Berlin’s fiscal hairshirt has long prevented growth-friendly policy. The shift looks permanent.

White House leans into an economic downturn

4 Mar 2025

Threats are now reality as 25% tariffs on Canada and Mexico take effect and double to 20% for China. US growth forecasts are already sinking with import surges only partly to blame: households are spending less as inflation fears spike. Policy is subduing all-important consumers.

Europe has money but few weapons for Ukraine

4 Mar 2025

US President Donald Trump has paused his country’s military support for Ukraine. Europe has the means to make up for it and plans to spend an extra $340 bln a year on its defence. But Kyiv still needs American weapons, which may force Europe to buy directly from the US.

How to sort winners from losers in AI’s civil war

4 Mar 2025

Some advocates believe artificial intelligence is poised to surpass human capabilities. Others see it more as a powerful problem-solving tool. In this episode of The Big View podcast, Felix Martin explores the implications of the diverging views for investors and economists.

EU banks’ M&A secret weapon nears sell-by date

3 Mar 2025

The ‘Danish Compromise’ lets Europe’s lenders buy insurers while shielding the capital hit. Yet Italy’s battle over $15 bln Banco BPM suggests the tool can also be hard to deploy. If financial groups fear regulators could withdraw the wheeze, maybe it’s no longer much use.

Climate policy requires a more realistic approach

27 Feb 2025

Despite trillions of dollars spent on renewable power, hydrocarbons account for over 80% of the world’s primary energy. Financial markets have lost confidence in the pursuit of net zero. The best governments can do is encourage the search for viable new electricity sources.

US budget botches subtraction and multiplication

27 Feb 2025

Republicans are trying to preserve $4.5 trln of tax cuts by slashing government spending. The healthcare, food assistance and revenue collection programs being targeted, however, punch far above their weight economically. Higher debt and slower growth will only spook bond buyers.